Foundry Daily News

20. March 2018

USA - Waupaca Foundry says 'unique' supply chain fuels growth

Waupaca Foundry has put the Great Recession well into its rear view mirror as the plant here that makes iron castings for parts used in cars and trucks now employs a five-year high of 560 people.One company advantage executives cite is the use of a just-in-time supply chain that they say is unique in their industry and a cost-saver for the business.

"It's incredible if you think of the volume in which we consume things," said John Wiesbrock, executive vice president of sales, marketing, and supply chain management for the company that operates seven plants in the United States.

From Waupaca's headquarters in Wisconsin, executives oversee a massive supply of goods to feed its U.S. factories on an hour-to-hour basis, they said.

In Etowah, the company makes castings used in auto brake calipers, anchors, differential cases, control arms and knuckles.

Doug Pohl, Waupaca's director of procurement and supply, said it's estimated that there's a truck dumping some kind of raw material used in production about every 20 or 30 minutes in Etowah.

"We're utilizing a lot of local resources to keep our plant running," he said.

Wiesbrock said Waupaca's existing supply chain evolved as its business has grown and it's necessary that it be flexible and nimble.

For example, at any time at the Etowah facility, there's only four to six hours supply of scrap metal, which is a key raw material used in production, he said.

For sand, another resource, there's one day's shift worth, or eight hours, Wiesbrock said. For bonding agents, there's only enough on site for two days, he said.

Brian Powel, the company's senior buyer, said that unlike other businesses which may store a lot of raw materials on site, that's not Waupaca's model.

"We don't put scrap there for a month," he said. "We don't have the space."

Waupaca gives suppliers a time slot by which they need to deliver materials to the plant, Powel said.

"It requires them to have more coordination with their trucking companies to make sure they hit their delivery times," he said.

The company has over decades established what Waupaca officials called a collaborative relationship with it suppliers, sometimes as long as 25 to 30 years.

Powel said, for example, that Waupaca doesn't specify tonnage on a month-to-month basis. If a plant needs more scrap, they'll call the supplier and ask it to add a load, he said. Or, conversely, if Waupaca doesn't use as much, that's not a problem, the official said.

"It's because it's a handshake and a long-term relationship with suppliers," he said. "We have abilities to make changes and they do. It's 100 percent handshake. It's understood that that's the way Waupaca does business and will continue to do business."

Rebounding from the recession

After the Great Recession hit in 2008 and prompted auto sales to crash, Waupaca idled the Etowah factory in early 2010. The company, which originally built the Etowah foundry in 2001, restarted the facility in mid-2011, ramping up employment at the McMinn County plant to 430 by mid-2013.

The sprawling plant located just off U.S. Highway 411 about 65 miles northeast of Chattanooga is expected to continue to grow production as it enters into new markets, said Wiesbrock. In Etowah, the company has placed a couple of new items into production such as control arms and knuckles, he said.

Employment should remain stable moving ahead, Weisbrock said. While the auto business has flattened, the off-highway and industrial side is picking up, according to Waupaca.

Concerning the threat of U.S. tariffs on some foreign goods, Weisbrock said Waupaca and its parent company, Hitachi Metals Group, is watching to see if there's an impact. The Japan-based Hitachi bought Waupaca in 2015.

"Our parent company has many businesses across the world. Changes in tariffs affects our parent," he said. But, Weisbrock added, the impact on Waupaca should be minimal, including in Etowah.

"We buy locally and we support the local, county, state and U.S. suppliers," he said.

Still, the executive said, Waupaca will continue to grow its supply chain process.

Even Waupaca's finished goods aren't sitting in warehouses for weeks or months, he said.

"Really, it's a cue for shipping so we can load trucks. Even that, it's a few days," he said. "For a U.S. manufacturer to be a global competitor, it must have velocity in throughput."